A recent article from Kline & Company explains the leanings of today's consumer, providing valuable insight into what your clients are thinking and how they are dealing with this brave new world.

As our vantage point on the worst recession since the Great Depression takes shape in the collective rearview mirror, one thing is certain: consumerism has changed dramatically. The buy-now-pay-later, keep-up-with-the-Joneses mentality that once drove market dynamics has been largely replaced by a more frugal and practical consumer approach. Most economic experts agree that this more cautious behavior isn't likely to be thrown to the wind any time soon. Aside from scaled-back spending habits, other equally transformative forces have emerged over the last 18-24 months that could forever change the face of the consumer products market.

Amid the dark cloud of high unemployment, home foreclosures and the global credit crisis, a transformation has taken shape: The modern consumer has undergone a makeover of sorts. Driven partly by economic forces, but also by a greater awareness of what really matters, environmental issues and corporate responsibility, the post-recession consumer has adapted to the new economy. Certainly job losses have played a large role in shaping a more frugal consumer, but data from across the consumer products markets indicates that it's not just about the money. As consumers evolve, product marketers must keep a finger on the pulse of what's driving consumer behavior in order to rise above growing competition.

There's no place like home

Cutbacks on travel and dining out have driven a growing number of consumers to reinvest in their homes to make it a more welcoming and inviting space. Where families were once constantly on the go, the modern family has rediscovered the comfort of home, and the evidence has emerged in some fairly mature product categories.

Less dining out also meant more dishes to wash: unit sales of dish detergents increased more than 3%, with dollar volume growing 7.5%. Spotting an opportunity, many brand marketers not only increased their prices, but also reduced package sizes, forcing consumers to replenish their supply more often. In an effort to deliver even greater value, provide added benefits, and compete with the soft-hands leader Palmolive, Procter & Gamble even bolstered its dish brands with Olay moisturizer for added skin-softening.

Another mature category enjoying a resurge in the stay-at-home culture, laundry detergent sales have grown more than 3%. Once the growth leader, Procter & Gamble's Tide has steadily inched up its pricing and features with combination products that seem to have finally pushed this stalwart beyond consumer's desires. In response to lagging sales, the company launched a value-priced Basics line to help regain momentum and stave off competition from private-label products, which have surged nearly 30% over the past year. Product innovation has also helped to boost growth in this category: Purex's 3-in-1 product that combines detergent, fabric softener and dryer sheet promises to make laundry simpler and easier for consumers. Meanwhile, the Gain brand has built a strong following on its unique ability to tell a fragrance story that appeals to consumers' desire for relaxation and escapism.

The escape to home trend has also sent the U.S. home fragrances market into recovery mode, posting a 0.4% growth rate in 2009—a meager increase, yet considerably better than the 2% decline in 2008. As consumers’ instant-gratification mentality released its grip, sales of candles—the quintessential home fragrances mainstay—rebounded from a tough 5.5% decline in 2008 at the hands of faster-acting room sprays and diffusers. Driven partly by specialty product launches into new channels, including Yankee Candle’s arrival at Target, and innovative new boutique-style product lines by S.C. Johnson and Procter & Gamble, the candles category posted a much-welcome 0.1% gain.

The private label draw

Across the board, consumers are drawn to value, and through the aggressive marketing tactics of many major retailers—including Walmart, Target, and Costco—private-label products have emerged as brands themselves. While private-label products surge in nearly every economic downturn, they have historically tumbled in the aftermath as consumers return to their tried-and-true favorites. However, this time may be different.

The private-label growth trend has also been at play in the U.S. personal care market. Sales of private-label personal care products surged nearly 6% in 2009, compared with an overall market decline of 0.8%. As consumers traded down for lower-priced products, brand manufacturers scaled back on domestic advertising and shifted their focus to burgeoning international markets. As a result, categories once thought to be infallible have declined. On the bright side, skin care and makeup are both showing signs of growth spurred by innovative combination/anti-aging formulas that promise near-professional results at an affordable price.

Naturals and corporate responsibility

The growth in natural personal care and cleaning products has maintained a steadily upward trend throughout the recession, and most marketers have faced the fact that this is no passing fad. Growing consumer awareness for natural products, coupled with a growing supply of natural raw ingredients, helped this market segment expand by nearly 12% through even the most difficult economic crunch. Especially at the global level, consumers’ affinity for natural products devoid of harsh chemicals and synthetic ingredients has pushed sales of these products beyond $18 billion. Brazil and Asia have posted the strongest growth, driven by rapid adoption among their large populations, growing consumer interest in grooming overall, and their natural and herbal traditions.

Even beyond the actual products, consumers have also grown increasingly aware of and concerned about the environmental and sustainability practices of their favorite brands. Reducing waste, packaging, and energy consumption is on everyone’s minds, forcing companies to evolve their operations to meet consumer demand. While today’s consumers are concerned about value, they also seek products and brands from companies whose values they can identify with. This movement has shaped the trend toward value packaging, concentrated and combination products, as well as reformulations—such as the eradication of phosphates from dishwasher detergent.

Professional products take a back seat

The new consumer frugality leveled a serious blow to the professional skin and hair care markets. With the focus shifting away from prestige to more budget-friendly indulgences, visits to spas, salons and medical offices have dropped off dramatically, with a drastic decline in demand for cosmetic procedures and take-home products. Aside from trading down to value-priced mainstream brands, consumers took to the Internet and home shopping channels for discounted pricing. However, an early read of 2010 results indicates that these professional channels are already rebounding.

At one time, in the face of these challenges, brand marketers might attempt to lead consumers down a chosen path by delivering products that meet the brand’s specific agenda. However, in the new global and inter-connected economy, consumers are now in the driver’s seat with more products and brands to choose from than ever before. With the loss of private label’s “generic” stigma, a more vocal and connected consumer audience and a renewed consumer focus on value, marketers must understand these evolving consumer insights to develop and deliver the innovative, value-driven products consumers demand.